NEW YORK (Dow Jones) — Investors are cashing in on US stock markets on the last trading day of the week. The Dow Jones index fell 0.5 percent. The S&P 500 lost 0.7 percent. The Nasdaq Composite is down 1.0 percent. According to trade sources, the renewed increase in bond yields weighed primarily on interest-sensitive technology stocks.
Since the accounting season for the second quarter is practically over and there is no major economic data due for publication on Friday, the interest rate issue is once again attracting attention. Conflicting signals came from officials at the US Federal Reserve. James Bullard, President of the Federal Reserve of St. Louis, had opted for one rate hike by 75 basis points at the next Fed meeting in September. The head of the Fed branch in Kansas City, Esther George, on the other hand, sees a need for discussion as far as the pace of interest rate hikes is concerned. Richmond Fed President Tom Barkin is scheduled to speak on Friday. And next week, the annual central bank meeting will take place in Jackson Hole, at which other central bank governors will speak alongside Fed Chairman Jerome Powell.
For Richard Hunter, head of markets at Interactive Investor, it is clear that curbing inflation is a top priority for the US Federal Reserve. The Fed is aware of the risk that it could throw the economy “off track”. “The market is still pricing in a half-percentage-point rate hike in September, but concerns are growing that there could be another 75 basis-point rate hike,” Hunter said. The market expects that the key interest rate will peak at 3.5 percent. And several Fed officials have signaled that there is still a long way to go before inflation is brought under control.
Deere under pressure by the numbers – bulling Foot Locker
Applied Materials are 1.2 percent weaker in terms of individual values. The business figures of the supplier of the semiconductor industry were better than expected, but the share cannot escape the general weakness of the sector. Deere’s share price fell 3.8 percent in response to the agricultural machinery manufacturer’s mixed figures. Sales in the third business quarter were in line with expectations, but profits were weaker. Deere blames the increased costs for the disappointing performance. Small consolation for investors: The company expects continued high demand in the coming year.
The shares of Footlocker (+20%) reacted almost euphorically to the surprisingly good figures of the shoe retailer specializing in sneakers. Declining user numbers push the stock trading platform Robinhood Markets down 5.6 percent. “Meme” stock Bed Bath & Beyond is down 43 percent after activist investor Ryan Cohen’s company RC Ventures announced its divestment of its stake in the home furnishings specialist. GM increase by 2.8 percent. The automaker will pay a dividend for the first time after a two-year hiatus.
Bond yields and dollar soar
Rate hike speculation continues to drive the dollar higher. Yields are rising again on the bond market. Gold is not in demand with the expectation of rising interest rates. In addition, the solid dollar weighs on the precious metal.
The strength of the US currency, combined with fears of recession, is also depressing oil prices, which have recovered significantly from their daily lows. The players fear that the demand for oil could fall due to the economy.
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INDEX last +/-% absolute +/-% YTD
DJIA 33,823.87 -0.5% -175.17 -6.9%
S&P 500 4,255.24 -0.7% -28.50 -10.7%
Nasdaq Comp. 12,832.77 -1.0% -132.57 -18.0%
Nasdaq-100 13,373.89 -1.0% -132.10 -18.1%
US Bonds
Term Yield Bp to VT Yield VT +/-Bp YTD
2 years 3.24 +5.5 3.19 251.2
5 years 3.09 +6.4 3.03 183.4
7 years 3.05 +8.7 2.97 161.3
10 years 2.97 +8.4 2.88 145.6
30 years 3.23 +8.5 3.14 132.5
FOREX last +/- % Fri 8:20am Thu 5:15pm % YTD
EUR/USD 1.0053 -0.4% 1.0081 1.0137 -11.6%
EUR/JPY 137.79 +0.5% 137.36 136.93 +5.3%
EUR/CHF 0.9626 -0.2% 0.9661 1.0488 -7.2%
EUR/GBP 0.8501 +0.5% 0.8467 0.8441 +1.2%
USD/JPY 137.01 +0.8% 136.30 135.09 +19.0%
GBP/USD 1.1826 -0.9% 1.1906 1.2010 -12.6%
USD/CNH (Offshore) 6.8380 +0.5% 6.8208 6.7956 +7.6%
Bitcoin
BTC/USD 21,494.03 -8.0% 22,762.79 23,419.99 -53.5%
RAW HOEL last VT close +/- % +/- USD % YTD
WTI/Nymex 90.77 90.50 +0.3% +0.27 +26.8%
Brent/ICE 95.76 96.58 -0.8% -0.82 +28.6%
GAS VT close +/- EUR
Dutch TTF 244.55 239.00 +2.3% +5.55 +234.3%
METALS last day before +/- % +/- USD % YTD
Gold (Spot) 1,754.53 1,758.84 -0.2% -4.32 -4.1%
Silver (Spot) 19.26 19.55 -1.5% -0.29 -17.4%
Platinum (Spot) 905.44 914.50 -1.0% -9.06 -6.7%
Copper Future 3.66 3.63 +0.7% +0.03 -17.5%
YTD at the close of the day
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(END) Dow Jones Newswires
August 19, 2022 09:43 ET (13:43 GMT)
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